This Is Just How Unaffordable Australian Rental Properties Are at the Moment

The Rental Affordability Index for November 2022 has been released, showing a snapshot of how manageable the costs of rental properties in Australia are for disadvantaged households.

Unsurprisingly, the information highlighted in the report is pretty damn bleak. It takes a look at the housing stress placed on certain renters right now, broken down by location and demographic.

SCG Economics and Planning, the group behind the report, shared in its summary of the Rental Affordability Index (RAI) that “Renting households on average have lower incomes, and therefore affordability issues affect renting households more than homeowners”.

By the data shown here, it’s not hard to see that there is a real problem at hand. Here are the main takeaways from the RAI report.

Rental affordability in Australia

To start, the Rental Affordability Index uses the 30 per cent rule. This means households that are spending close to or more than 30 per cent of their income on rent are considered to be “in housing stress”.

“Under those circumstances, the cost of housing affects a household’s ability to pay for other primary needs,” SCG Economics and Planning shares.

Primary needs include food, power, health costs and similar.

With that considered, relative unaffordability was measured this way in the RAI:

• If the share of income spent on rent is 15 per cent or less, it’s considered ‘affordable’
• 20 – 25 per cent of income is considered ‘acceptable’
• 25 – 30 per cent of income is considered ‘moderately unaffordable’
• 30 – 38 per cent of income is considered ‘unaffordable’
• 38 – 60 per cent of income is considered ‘severely unaffordable’
• 60 per cent of income or more is considered ‘extremely unaffordable’

And these are the household types and annual incomes reviewed in the report:

• Single pensioner: $35,600
• Pensioner couple: $56,400
• Single person on Jobseeker: $21,300
• Single part-time worker parent on benefits: $43,000
• Single full-time working parent: $101,700
• Single-income couple with children: $101,700
• Dual-income couple with children: $203,400
• Student sharehouse: $84,600
• Minimum wage couple: $84,500
• Hospitality worker: $60,800

Using these parameters and considering the housing needs of each group (how many bedrooms etc), the RAI reviewed median rents across Australia and highlighted just how affordable they are, on average.

The full report, which you can find here, goes into a fair amount of detail on each demographic. But here are the highlights we found most eye-opening.

• For a single person on JobSeeker, the RAI highlighted there are “Severely Unaffordable to Extremely Unaffordable rents across all metropolitan and regional areas”.
• For a single pensioner, the RAI found rent to be “Extremely Unaffordable to Severely Unaffordable in metropolitan areas and Severely Unaffordable to Moderately Unaffordable in regional areas”.
• For a pensioner couple, the report found rent to be “Unaffordable to Severely Unaffordable in metropolitan areas and Unaffordable to Acceptable in regional areas”.
• For a single part-time worker parent on benefits, the RAI found rents to be “Extremely Unaffordable to Severely Unaffordable in metropolitan areas and Severely Unaffordable to Moderately Unaffordable in regional areas”.
• For a single full-time working parent, rents were deemed “Moderately Unaffordable to Affordable in metropolitan and regional areas”.
• For a single-income couple with children, the report found there to be “Moderately Unaffordable to Acceptable rents in most metropolitan and most regional areas”.
• For a dual-income couple with children, the rental rates were considered “Affordable to Very Affordable across all metropolitan and regional areas”.
• For a student share house, rent was found to be “Unaffordable to Moderately Unaffordable across most metropolitan areas”.
• For minimum wage couples, rent was “Unaffordable to Acceptable across metropolitan and regional areas”.
• For a hospitality worker, rental costs were reported as “Severely Unaffordable to Moderately Unaffordable across both metropolitan and regional areas”.

So, yeah. The only group that didn’t come out with at least one mention of unaffordable was dual-income couples with kids. Everyone else is finding rent at least ‘moderately unaffordable,’ if not worse.